How the Control Test determines corporate nationality under the Foreign Investments Act.
Why greater economic rights for foreigners do not breach the 60–40 rule if voting control remains Filipino.
Key Supreme Court rulings, including Roy III v. Herbosa, affirming allowable structures.
Practical applications: dual-class shares, dividend preferences, and par value variations.
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This section addresses common concerns raised by businesses, legal teams, and finance professionals looking for clarity on complex issues. If you’re seeking practical answers or a better understanding of key concepts, you’ll find helpful insights here.
Are foreigners allowed to hold shares with higher dividends?
Yes. The Supreme Court held that higher dividend rights for foreigners are permissible if Filipinos still own at least 60% of voting shares and 60% of total outstanding capital stock.
Does the 60–40 rule apply to each class of shares?
No. The Court rejected this theory and ruled that the 60–40 rule applies to voting stock and total outstanding shares—not each share class.
Can foreigners own 100% of preferred shares?
Yes, if preferred shares do not shift voting control and Filipinos still maintain 60% ownership of total outstanding shares.
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